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Government per diem rates to stay where they are
The General Services Administration (GSA) announced this week that it won’t alter a market-based methodology to calculate federal per diem rates. Federal per diem rates will currently stay frozen at the FY2012 level.
The American Hotel and Lodging Association, The US Travel Association and other groups strongly lobbied the GSA to maintain the status quo.
The AHLA states that the freeze while "not ideal" was a "far less radical approach than the crippling move that GSA had contemplated."
The GSA had calculated per diem rates based on the average rate of mid-priced hotel rooms for close to a decade. Hotel "average daily rates" (ADR) are fixed by including rates from hotels in four tiers of "mid-price range" properties. The GSA omits rates from hotels at the bottom and top of the range—economy and luxury—as it considers them outside the median price range.
After fixing these ADR rates for locations around the country, GSA reduces the rates by five percent and sets per diem rates at that discounted level.
What the GSA had proposed to do was to remove data from a whole tier of mid-priced hotels in the process of calculating the average. The AH&LA says that if the change had been made it would have resulted in an artificially low "average" rate, not reflective of actual room rates. They say that if the new terms had been put into effect, per diem rates would have been lowered by as much as 30 percent.
Roger J. Dow, president of the US Travel Association said in a statement that:
"This decision was reached because so many industry leaders sent a clear message that travel is an essential tool for the government and critical to local economies. Working with the American Hotel & Lodging Association and the U.S. Chamber of Commerce, among others, we successfully generated dozens of letters from leaders on Capitol Hill and met repeatedly on this issue with members of the Administration to support this issue. State travel associations and destination marketing organizations from across the nation hosted roundtables with government officials to discuss the importance of federal travel. In the end, our message was heard loud and clear."
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